TaxTMI 
TaxTMI 
TaxTMI 
2005 (7) TMI 653
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....spondents 3 to 5. Suit was decreed on 30.1.1995 for an amount of ₹ 3,51,36,073,18 inclusive of costs with future interest at 23.25% from the date of suit till realisation by sale of items 1 to 12 in the plaint A schedule immovable properties and also the movables described in plaint B to F schedule. Bank also filed OA. 1081 of 1998 before the Debts Recovery Tribunal, Ghennai for recovery of the amounts as per the decree by sale of immovable properties mortgaged in favour of the bank. Noticing that the second respondent Tahsildar initiated proceedings for sale of some of the items of properties mortgaged in favour of the bank for recovery of arrears of sales tax due from respondents 3 to 5 bank has approached this Court with the presen....
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....and it does not override or nullify the decree of the Civil Court passed in OS. 720 of 1992 as early as 30.01.1995. Counsel submitted that the equitable mortgage was created by respondents 3 to 5 in favour of the Bank on 12.06.1984 and the bank had filed the suit on 15.05.1992. Suit was decreed on 30.1.1995. Counsel pointed out the second respondent issued Ext.P3 notice on 2.6.1999. Consequently, the bank has got prior charge over the immovable properties proposed to be sold for sales tax arrears by virtue of equitable mortgage created as early as 12.6.1984. Placing considerable reliance on paragraph 21 of the decision of the Supreme Court in Dena Bank v. Bhikhabhai, counsel submitted that when the rights of the bank was crystalised by a de....
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....rge in respect of sales tax arrears. Reference may be made to the decisions of the Apex Court in State Bank of Bikaner & Jaipur v. National Iron & Steel Rolling Corporation and Ors. (1995) 96 STC 612), Delhi Auto and General Finance Pvt. Ltd. v. Tax Recovery Officer and Ors. (1999) 114 STC 273), Dattatreya Shanker Mote v. Anand Chintaman Datar , Dena Bank v. Bhikhabhai Prabhudas Prakash Co. and various other decisions. We may refer to the latest decision of the Apex Court in State of M.P. v. State Bank of Indore, wherein the court examined the charge created under Section 33C of the M.P. General Sales Tax Act, 1958 and held that Section 33C creates a statutory first charge that prevails over any charge that may be in existence. The Court he....
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....nd until the decree is executed the Bank would not procure the property and the State's overriding rights would have precedence over that of the Bank. When a first charge created by the operation of law over any property, that charge will have precedence over an existing mortgage and the decree obtained by the bank against the mortgagor will not affect the State since State was not a party to the suit. Decree has only conclusively determined the rights between the mortgagor and mortgagee which would not affect the statutory rights of the State. The expression "rights of parties" used in Section 2(2) means rights of parties to the suit. State which has got a statutory first charge under Section 26B of the K.G.S.T. Act would pre....